Home Correction trading Beware of exchanges based on 13F data, which reveal a preference for the technology

Beware of exchanges based on 13F data, which reveal a preference for the technology

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It is undeniable that the market has been particularly turbulent in recent months as inflation soared. Market watchers wonder if inflation has peaked, which will impact which stocks are riding the wave and which are sinking.

The 13F deposits of Q4 are in

As a result, individual investors can keep a closer eye on smart money as they try to pick stocks wisely despite the extreme volatility. Hedge funds and other institutional investors have filed their quarterly 13Fs with the Securities and Exchange Commission, providing a breadcrumb trail for individual investors to follow.

A general analysis of hedge fund transactions during the fourth quarter shows that tech stocks received a boost from smart money, as institutional investors increased their tech holdings by around 1% in total. However, things have changed so quickly that it may no longer make sense to stock up on technology.

Nokia, VMware and Clarivate were among the biggest technology winners in the fourth quarter. Meanwhile, hedge funds reduced their communications holdings by around 1%, with Meta Platforms, Charter Communications and Comcast leading the decline.

Despite the sell-off that temporarily swept the technology at various times over the past few months, hedge funds largely turned to technology in the fourth quarter, avoiding communications in the process. However, rising interest rates threaten both technology and communications this year.

Rivian Automotive

A review of Q4 13F filings also reveals remarkable stock. During the fourth quarter, there was quite a bit of activity at electric vehicle manufacturer Rivian Automotive. Rivian has been on a steady downward trend since its peak in mid-November and is down more than 34% in the past six months. Year-to-date, the automaker’s stock is down more than 35%.

The latest 13F filings suggest that several large institutional investors have decided to buy Rivian’s stock decline. Among the well-known investors who established positions in Rivian during the fourth quarter was George Soros, who disclosed a nearly 20 million share position in the electric pickup truck maker.

Phillipe Laffont’s Coatue Management has established a new position in Rivian, alongside Lee Ainslie’s Maverick Capital, Dan Loeb’s Third Point, Andreas Halvorsen’s Viking Global and Chase Coleman’s Tiger Global.

Movements in technology in Q4

Soros also established a position in Peloton Interactive, while Tiger Global added to his stake. On the other hand, Coatue and Viking Global cut the exercise technology company. Baupost Group bought Fiserv, Grab Holdings and NortonLifeLock and added to Qorvo, but left eBay and reduced its stake in Meta Platforms, Alphabet and Intel, Facebook’s parent company.

Coatue left 3D Systems, Robinhood Markets and Nuance Communications. He increased his stakes in Tesla, Microsoft, NVIDIA and Amazon, but trimmed Door Dash, Twilio and Snowflake. Maverick Capital added to its positions in Amazon, Activision Blizzard and NVIDIA but reduced its holdings in Coupang and Adobe Systems. Leon Cooperman’s Omega Advisors left Alibaba and Meta Platforms, while Soros Fund Management increased its stake in Uber but reduced Amazon and Alphabet.

Tiger Global increased its stakes in Snowflake but resisted the push into technology by reducing its positions in Microsoft, Roblox and Amazon. David Einhorn’s Greenlight Capital established a new position in Intel but reduced its stakes in GoPro and Twitter, while Glenview Capital established new positions in Activision Blizzard, Alibaba and Amazon and increased its stake in Uber. He left Meta Platforms and reduced his stake in Fiserv.

Third Point established a new position in Grab Holdings and increased its holding in Dell while maintaining its positions in Microsoft and Alphabet. The fund left DiDi Global, Intel, Meta Platforms and Activision Blizzard. Paul Singer’s Elliott Management maintained its position on Twitter. ValueAct increased its stake in Fiserv, while Jeffrey Smith’s Starboard Value established a new position in GoDaddy and exited Box Inc.

Viking Global established new positions in Twilio and Take-Two Interactive and increased its holdings in Uber and Meta Platforms. He also bucked the tech uptrend as he exited Snowflake. Warren Buffett’s Berkshire Hathaway, who has long shunned technology under his leadership, has created a new role at Activision Blizzard and maintained positions at Apple, Microsoft and Amazon. The company left Sirius XM Holdings.

David Tepper’s Appaloosa left Twitter, Alibaba and Qualcomm and reduced Uber. Corvex Management maintained its positions in Microsoft and Alphabet but left Activision Blizzard. Stanley Druckenmiller’s Duquesne established a new position in Snap Inc and increased his holdings in Coupang, Carvana and Microsoft while exiting Meta Platforms and downsizing Amazon and Alphabet.

Tiger Global established a new position in Grab Holdings and added to its holdings in JD.com, Carvana, Snowflake and Door Dash while maintaining its positions in Meta Platforms, Alibaba and Netflix. The fund cut Roblox, Microsoft and Uber. Baupost Group established new positions in Grab Holdings and Fiserv, increased its stake in Qorvo and exited eBay. It also cut Intel and Meta platforms.

Soros cut Activision Blizzard, left Coupang and increased his stake in Uber.

Communication

Coatue bucked the trend against communications by creating a new position at Discovery Communications. Greenlight Capital also created a new position in Discovery Communications. Third Point also went against the tide of communications by taking a new position in Comcast, while Viking Global increased its holdings in Comcast and T-Mobile.

Nelson Peltz’s Trian Fund maintained its position in Comcast.

Berkshire Hathaway cut Charter Communications, while Appaloosa, Duquesne and Corvex cut T-Mobile. Elliott Management maintained its position in AT&T.

Payments and finance

Coatue and Corvex established new positions in Visa and Mastercard, while Maverick Capital increased its stakes in both credit card companies but exited Blackstone. Appaloosa left Visa, while Corvex Management established new positions in Visa and Mastercard. Berkshire Hathaway cut Visa and Mastercard and maintained positions in Bank of America, Bank of New York Mellon and US Bancorp.

Greenlight established a new position in Global Payments as Glenview Capital increased its stake in the company. Glenview also left Visa, while Corvex maintained its position in JPMorgan. ValueAct maintained its position in Citigroup and Viking Global established a new position in American International Group. Soros cut JPMorgan. Tiger Global increased its stake in Square.

Other notable activity

Other key releases include PG&E by Baupost. Appaloosa also reduced its stake in PG&E alongside Third Point, which also reduced Walt Disney alongside Corvex. Coatue established a new position in Pfizer, while Omega increased its stake in General Motors alongside Soros.

Appaloosa has created a new position at GM. Third Point established new positions in Hertz and Expedia while Duquesne maintained positions in Airbnb and Booking Holdings and exited Penn National Gaming. Duquesne also discounted Expedia. Viking Global established a new position in Zillow and increased its stake in General Electric. Soros increased his stake in Caesars Entertainment.

And the current quarter?

While many individual investors make their decisions based on this week’s 13F filings, which show stock movements during the fourth quarter, it’s important to look forward rather than back. It’s no secret that interest rates will rise in 2022, but the question is how fast the Fed will raise them. However, when rates rise, they will hurt heavily indebted tech companies.

The tech-heavy Nasdaq Composite entered correction territory in January and continued to struggle. The unprofitable tech names that have become the beacon children of the pandemic bull market will face serious problems when debt is no longer cheap. And as inflation rages on, investors will naturally seek companies with strong brands and the pricing power to pass their higher costs onto customers.